“WASHINGTON (AP) — President Barack Obama says he cannot “govern out of anger” just because of public outrage over bonuses paid at financial institutions kept afloat by taxpayer dollars.
Obama’s declaration came as he pushed for a $3.6 trillion federal budget proposal that already is opposed from within his own party. As he seeks lawmakers’ support for his first budget, he took a political risk in signaling discomfort with a separate plan that slaps a punitive, 90 percent tax on bonuses paid to American International Group employees.
Obama, a law professor-turned-chief executive, said during an interview broadcast Sunday that he does not like the idea of “passing laws that are just targeting a handful of individuals” or using the tax code to punish people.
“Let’s see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness, but don’t hamper us from getting the banking system back on track,” Obama said on CBS’ “60 Minutes.”
I’m beginning to think that Barack Obama, derided as a socialist by some, is actually the best friend that capitalism could hope for at the moment. The rising tide of populist anger at Wall Street from both the right and left would certainly make it easy to demagogue on that issue and really stir things up. If Obama truly wanted to build political support for a wholesale assault on corporate America, this would be the opportunity.
But that’s not what’s happening, as his stance on the AIG tax bill indicates. Instead, Obama is trying to use government to save capitalism.
The ideological right doesn’t like it because his approach involves government more deeply in business, but business itself strongly supports much of what Obama is doing. Groups such as the U.S. Chamber of Commerce and National Association of Manufacturers backed his stimulus plan and they also back his efforts to rescue the banking system and automakers with infusions of government cash.
The left isn’t particularly thrilled either by Obama’s approach either, with many suggesting that the president is squandering a historic opportunity to bring corporate America to heel.
For instance, there’s Joel Kotkin, writing in Newsweek:
“In this respect, the Obama administration, criticized justifiably as too radical on some issues, has been far too timid. It has squandered much of the stimulus effort on maintaining fundamentally corrupt, even sociopathic, institutions like AIG or Citigroup. By taking direction from establishmentarians like Treasury Secretary Timothy Geithner, one of the original architects of the Bush financial bailouts, the current administration has seemed as complicit in condoning and even rewarding Wall Street’s transgressions as the last one.”
“It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.”
People on both the left and right would be happy to see Obama fire Tim Geithner as Treasury secretary. People on both the left and right are all too ready to end government support for banks and automakers and announce that CEOs will have to sink or swim on their own. Americans who don’t agree with each other about much would applaud Obama for taking that kind of approach, if for very different reasons.
But again, that’s not what he’s doing.
He is voicing anger and frustration with those in corporate America and finance who don’t “get it,” in part because they really don’t get it and in part because it’s important to provide an outlet for public feelings on the issue. He is also forcing increased regulation on business and advocating more sensible compensation policies because both are absolutely necessary — economically, politically and morally.
But he’s doing all that in an effort to save capitalism, not end it.